PSALM still has $10.612-billion collectible after power-asset sale

by Lenie Lectura, 16 March 2015
from BusinessMirror

Proceeds from the sale of state-owned power assets has reached $19.878 billion, data obtained from the Department of Energy (DOE) showed.

In its latest report, actual collection stood at $9.266 billion as of end-October last year. This means that $10.612 billion has yet to be collected from the privatization of government-owned power assets.

Of the total amount collected, $3.534 billion came from power generation assets sold; $3.772 billion from transmission assets; $1.956 billion from appointment of independent power producers administrators (IPPAs); and the remaining from decommissioned plants.

The Power Sector Assets and Liabilities Management Corp. (PSALM) has yet to receive the payment of $2.611billion from the sale of transmission assets, and $8.001 billion from proceeds of IPPAs.

PSALM is the agency mandated by Republic Act 9136, or the Electric Power Industry Reform Act of 2001, to handle the sale of the remaining state power assets and financial obligations of the National Power Corp. (Napocor).

“The proceeds were utilized for debt repayment, regular payment of debts and IPP obligations, and payment of other privatization-related expenses,” the DOE report stated.

In particular, $1.298 billion was used for debt prepayment; $4.466 billion for regular debt service; $2.027 billion for lease obligations; $107 million for other expenses; $1 million for Transco operational expenses; and $1.156 billion was placed in temporary investment.

In all, $7.8 billion was used for the liquidation of PSALM’s financial obligations.

Emmanuel Ledesma Jr., PSALM president, earlier said that the government stands to earn roughly $3.2 billion more from the 1,600 megawatts (MW) of power-generation capacity that will be offered to the private sector.

Among the power facilities that are up for bidding are the 32-MW Power Barge 104 in Davao City; the 727-MW Caliraya-Botocan-Kalayaan hydropower facility; the Agus hydropower plant; the Ippa contracts for the Unified Leyte geothermal power plants; the 210-MW Mindanao coal-fired power plant in Misamis Oriental; and the 140-MW Casecnan multipurpose hydroelectric power plant.

The agency will also rebid the 850-MW Sucat thermal power plant. “There’s still roughly around 1,600 MW remaining. So assuming the rule of thumb is applied, then that’s going to be multiplied by $2 million per MW,” Ledesma said.

Only about 20 percent of government-owned power assets have yet to be privatized since PSALM took over Napocor, the PSALM official added.

So far, the biggest power facility sold by PSALM is the 218-MW Angat hydroelectric power plant to Korea Water Resources Corp. (K-Water) for P19.66 billion.

K-Water took over the facility on Friday, more than four years since it won the bidding in April 2010. The delay was caused by a number of reasons, including a court battle over the legality of PSALM’s conduct of the bidding.

The privatization of the Angat power facility will not affect the water supply from the Angat reservoir, as the Angat Dam remains the property of the Philippine government.

Other power facilities sold since Ledesma was appointed include the 153.1-MW Naga Power Plant to SPC Power Corp. for P1.14 billion, and the Ippa for 40 strips of energy of Unified Leyte Geothermal Power Plants at P4.6629 per kilowatt-hour.

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